Opinion
No. A06-747.
Filed: March 6, 2007.
Appeal from the District Court, Stearns County, File No. C9-05-1207.
Christopher W. Harmoning, Gray, Plant, Mooty, Mooty Bennett, P.A., St. Cloud, MN 56301 (for respondent).
David T. Johnson, Amundson Johnson, P.A., Paynesville, MN 56362 (for appellant).
Considered and decided by PETERSON, Presiding Judge; DIETZEN, Judge; and ROSS, Judge.
UNPUBLISHED OPINION
In this appeal from a judgment that ownership of a vacated street reverts to respondent, appellants argue that because they owned the property abutting the street when it was vacated, they became the owners of the vacated parcel. We affirm.
FACTS
Respondent Prairie Industrial Park, Inc., submitted a proposed plat for Prairie Industrial Park to the City of Rockville for consideration and approval. During the review process, the city raised concerns about the location of a street in the industrial park. The street, Prairie Drive, provided access to and from the industrial park, and its location affected traffic outside the park. Without resolving the concerns about the location of Prairie Drive, the city approved the plat, including the location of Prairie Drive as originally platted, in December 2002, and respondent filed the plat on December 9, 2002. Respondent's plan was to construct Prairie Drive as platted but continue to pursue options for relocating it.
In 2003, respondent and appellants Jeffry Lahr and Sherrie Lahr began negotiating a purchase agreement for appellants' purchase of a lot in the industrial park. The lot was south of and adjacent to Prairie Drive, as platted, and contained 52,442.5 square feet of land. The parties arrived at a purchase price of $1.20 per square foot, which resulted in a total price of $62,931. Appellants were aware of the possibility that Prairie Drive would be relocated, and they expressed an interest in buying additional property if the street was relocated. Based on the available information about the possible relocation of Prairie Drive, respondent estimated that the additional property would be approximately 6,000 square feet in size. Respondent agreed to sell the additional property to appellants for one dollar per square foot.
Appellants' attorney drafted a provision in the purchase agreement, which states:
If Prairie Drive, as shown on the plat of Prairie Industrial Park, is relocated to the north, as proposed by local governing authorities, Buyer shall purchase the property located between the Northerly boundary of the property which is the subject of this Purchase Agreement and the Southwesterly right-of-way line of Prairie Drive, as relocated, for the price of $1.00 per square foot, not to exceed 6,000 square feet.
When the parties signed the purchase agreement, it was possible, but not certain, that Prairie Drive would be relocated, and no one knew precisely when or where it would be relocated. Respondent conveyed the lot to appellants on June 30, 2003. In May 2004, the City of Rockville acquired property that allowed Prairie Drive to be relocated to the north, and after it was relocated, the city vacated part of the originally platted Prairie Drive, including the part that was adjacent to appellants' lot.
The actual size of the resulting parcel between the lot that appellants purchased and the relocated Prairie Drive was 22,619 square feet. Respondent brought a declaratory-judgment action alleging that at the time the purchase agreement was signed, the parties understood that the size of the parcel resulting from the relocation would be approximately 6,000 square feet and that the parties' misunderstanding regarding the actual size of the resulting lot was a mutual mistake of fact. Respondent sought a declaration that because of this mutual mistake of fact, respondent is entitled to a judgment that the provision in the purchase agreement that requires appellants to purchase the resulting lot is voidable, or, in the alternative, to a judgment reforming the purchase agreement to state that appellants shall purchase the entire resulting lot for one dollar per square foot.
The district court concluded that the provision in the purchase agreement that requires appellants to purchase the vacated parcel was the product of the parties' mutual mistake of fact and that the provision is voidable and ordered that judgment that the vacated parcel reverts to respondent be entered. Appellants made no posttrial motions, and judgment was entered. This appeal follows.
DECISION
"In a declaratory judgment action tried without a jury, the court as the trier of facts must be sustained in its findings unless they are palpably and manifestly contrary to the evidence." Samuelson v. Farm Bureau Mut. Ins. Co., 446 N.W.2d 428, 430 (Minn.App. 1989), review denied (Minn. Nov. 22, 1989). The district court's determination of questions of law is subject to de novo review. Rice Lake Contracting Corp. v. Rust Env't Infrastructure, Ins., 549 N.W.2d 96, 98-99 (Minn.App. 1996), review denied (Minn. Aug. 20, 1996). "The interpretation of a contract is a question of law if no ambiguity exists, but if ambiguous, it is a question of fact and extrinsic evidence may be considered." City of Virginia v. Northland Office Props. Ltd. P'ship, 465 N.W.2d 424, 427 (Minn.App. 1991), review denied (Minn. Apr. 18, 1991).
Appellants argue that because respondent did not own the vacated portion of Prairie Drive when the purchase agreement was signed, the law prevents performance of respondent's agreement to convey the vacated parcel, thereby relieving appellants of any obligation to pay for the parcel. Appellants contend that when the city vacated the portion of Prairie Drive that was adjacent to their lot, they became the owners of the vacated parcel.
The general rule in Minnesota is that upon vacation of a street or alley, abutting landowners own to the middle of a street or alley. This rule is subject to an exception where the grantor of the easement owned the land up to and including the street, but not on the other side of the street. Upon vacation, the fee reverts to the grantees who obtained their title from the grantor of the easement.
Edgewater Cottage Ass'n v. Watson, 387 N.W.2d 216, 218 (Minn.App. 1986). Citing the general rule stated in Edgewater, appellants conclude that a purchase agreement pertaining to land that is not owed by the seller should not change the result of the vacation and that the district court misapplied the law.
But appellants' argument is based on the incorrect premise that when the purchase agreement was signed, respondent agreed to convey land that it did not own. Under the plain language of the purchase agreement, appellants agreed to buy additional land from respondent if Prairie Drive "is relocated to the north, as proposed by local governing authorities." When Prairie Drive was relocated, the law did not prevent respondent from conveying the land that appellants had agreed to purchase. All that was necessary for respondent to convey the land was to first have the city vacate the original Prairie Drive, which the city council had authority to do. See Minn. Stat. § 412.851 (2006) (establishing procedure for city council to vacate street by resolution).
Relying on the general rule that when a street is vacated, the fee reverts to the abutting landowners, appellants believe that because they were the abutting landowners when Prairie Drive was vacated, ownership of the land where the street was located reverted to them. But the supreme court explained long ago that
the owner can sell a lot adjoining a street, and part with or reserve the interest in the street, subject to the easement, as he sees fit. What he has done in a particular case depends necessarily upon the intention of the parties. . . .
When a deed contains an express reservation, or the circumstances justify the inference of intention not to convey a fee to any part of the street, the vendor remains its owner.
White v. Jefferson, 110 Minn. 276, 282, 124 N.W. 373, 374 (1910).
When appellants purchased the land abutting Prairie Drive, they agreed that if the street was relocated, they would purchase from respondent the land abutting their lot where the street had been located. Although this provision of the purchase agreement does not mention vacating the street or refer to the reversionary interest in the vacated street, it necessarily implies that the parties did not intend to convey the reversionary interest in the vacated street because, if that was conveyed, there was no reason for appellants to agree to buy additional land from respondent if Prairie Drive was relocated. Therefore, when respondent sold the lot abutting Prairie Drive, it retained its interest in Prairie Drive and agreed to sell appellants additional land if Prairie Drive was relocated.
Because appellants have not demonstrated that the district court erred in its findings of fact or in determining questions of law, we affirm the judgment that ownership of the vacated parcel reverts to respondent.
Affirmed.